Wednesday, September 30, 2015

'It's pretty remarkable'

Jeff White, a military expert and former officer with the Defense Intelligence Agency, told BI that, unlike the US, Moscow is making bold moves to influence dynamics on the ground.

"The Russians don't care what we think. They've got a plan — they have an operation set in motion — and they're going to go ahead with it," White said in an interview.

"They're challenging the US directly to respond, and they're exploiting the US weakness there. Russians are operating on their own timetable, with their own objectives, and they know what they want to achieve."

White added that Moscow is "betting that the US won't respond strongly. If the US begins to take a stronger stance on this, the Russians might adjust — but they just told us, 'We don't care what you're doing. We're going ahead.' It's pretty remarkable."

We are electing this dingbat Hillary simply because of some affirmative action quota in the Democrat Party?

AEI: The California Public Employee Retirement System (CalPERS) issued a report in July claiming that its benefit payments to retired government employees in 2013-2014 “supported 104,974 jobs throughout California and generated more than $15.6 billion in additional economic output.”

Through an economic “multiplier effect,” in which pension benefit checks are spent and re-spent throughout the economy, CalPERS claims to have generated over $387 billion in sales tax revenues and $328 billion in property tax receipts.

To reduce pension benefits for public employees, the study implies, would harm the overall California economy.

One would expect a study like this to gild the lily a bit. But the CalPERS economic stimulus study goes far beyond that: It is a cost-benefit analysis that doesn’t include any costs. This study is nothing short of propaganda that wouldn’t get a passing grade in a freshman economics course.

The study, titled “CalPERS Economic Impacts in California,” is nothing new. For several years, public employee retirement systems around the country have published “pensionomics” studies claiming that the benefits that they pay stimulate the economy and create jobs.

The logic of these studies is simple: Retirees spend their CalPERS benefits on, say, food, housing and medicine. The grocers, homebuilders or health care providers who receive retirees’ money re-spend it, and so on down the line.

CalPERS claims that thanks to this “multiplier effect,” a single dollar of pension benefits creates $2.02 in total economic activity. CalPERS uses an economic model to track these purported economic gains by industry and county so everyone can see how much they benefit.

But for all the seeming economic sophistication, the CalPERS study lacks one important component, called “counting both sides of the equation.” It needs to count economic costs as well as economic benefits.

This is of course the absolute bullshit one would only expect from UC Berkeley. The California public sector system has done more to prolong the recession then any other institution.

Here is the California unemployment rate. Why is unemployment longer and more prolonged in California? Simple, the pension laws require that cities and counties lay off public employees when the stock market crashes. This is one bonehead idea that Kanosian idiots favor in public pensions. So we get the double whammy when the recession hits, a negative feed back, otherwise known as the stupid Kanosian multiplier less than one.

Yahoo: Seniors, get ready to dig deeper into your wallets, or to start shopping more.

More than 15 million people enrolled in the top 10 Medicare "Part D" prescription drug plans will face average premium hikes of 8 percent next year, according to a new analysis. Those top 10 plans account for more than 80 percent of enrollment in such drug plans, the Avalere Health consultancy found.

Five of the top prescription drug plans will see double-digit premium hikes next year.

Avalere also found that the average prescription drug plan premium in 2016 will top $40 per month for the first time in the federally subsidized program's history. If all Part D enrollees stay in their current plan, the average premium for all prescription drug plan would rise from $38.83 per month this year to $41.34 per month in 2016.

The findings come as rising prescription drug costs have drawn renewed attention from Congress and Democratic presidential candidates, including Hillary Clinton and Sen. Bernie Sanders. Trustees in the Medicare program said that in 2014, there was a 14 percent overall increase in the cost of Part D benefits, and a per-capita increase of 11 percent. The trustees singled out the very high prices of new specialty medication, including for hepatitis C, as a driving factor in the cost increases to Medicare.

It spreads. Part D inflatuion overlaps with Obamacare hospital services inflation. DC has put a huge demand bottleneck into the medical industry.

Tuesday, September 29, 2015

Telegraph: The International Monetary Fund (IMF) has issued a double warning over higher US interest rates, which it said could trigger a wave of emerging market corporate defaults and panic in financial markets as liquidity evaporates.

The IMF said corporate debts in emerging markets ballooned to $18 trillion (£12 trillion) last year, from $4 trillion in 2004 as companies gorged themselves on cheap debt.

It said the quadrupling in debt had been accompanied by weaker balance sheets, making companies more vulnerable to US rate rises.

Corporations in emerging markets borrowing in US dollars. When that happens their income in local money and their debt payments in dollars have a different term structure, that means a large liquidity premium. US rates rise they have little ability to restructure debt.

AEI: Even with dynamic scoring, Donald Trump’s tax plan is likely to lose a ton of money. (And, yes, I am dismissing out of handTrump’s 6% growth claim. Please.) But Trump isn’t counting entirely on faster economic growth to make the numbers work. As he points out in the WSJ today:

Finally, this plan will not add to our deficits or to the national debt. With disciplined budget management and elimination of waste, fraud and abuse, this plan will allow the nation to balance the budget, boost the economy to record levels, clear the backlog of workers sitting at home and begin the process of reducing the debt

I am not sure what all that hugger mugger about “disciplined budget management and elimination of waste, fraud and abuse” means, but it probably doesn’t mean entitlement reform that would reduce future projected spending. As Trump has said, “Every Republican wants to do a big number on Social Security, they want to do it on Medicare, they want to do it on Medicaid. And we can’t do that. And it’s not fair to the people that have been paying in for years and now all of the sudden they want to be cut.”

Now keep in mind that even as deficits, debt, and spending are projected to rise, discretionary spending — the usual target of “waste, fraud, and abuse” charges — is projected keep falling as a share of GDP. Also keep in mind that Trump wants toreduce deficits and debt, not just maintain the status quo or current trajectory. And he is going to do all that without touching the fastest growing part of the budget? While also increasing defense and infrastructure spending? Maybe this was the sort of thinking that put those Trump casinos into bankruptcy.

Trump is the typical Communist Republican and like Reagan he will imme3diately create a recession. The Republican Communist Party.

Monday, September 28, 2015

Sounds like we are close. We are pulling a 1.5% GDP growth rate, not enough to justify the use of dollars! The market is in a severe bear. And, DC is abnout to shut bevcause no one wants to pay for all the crap the Kanosians ordered.

The Kanosians ran up some huge bills, especially with Obamacare inflation.

Friday, September 4, 2015

Kevin Drum claims we are in an era of low healthcae inflation. He fails to compare that inflation with current general inflation.

Compare general inflation with healthcare inflaion. Currently health care has a 4% inflation rate while the deflator is at 1%, That is a 3 point differential. And we see it is about to start rising again.

Tuesday, September 1, 2015

The chart is fed target, effective rate and one year treasury. We will handwave the second derivative in this chart.

For 1993 to 1994 no movement. Movement starts with the effective rate (red), a quarter point. Did the Fed foretell a rate hike? Could be, collusion is ommon. But then the one year takes off, so you know we have a race, and the Fed is behind, and the one year got some mojo. The Fed never really catches up.

Krugman, look at this chart and explain he collusion that allowed to Fed to fix the race, and bet against itself. The plot may well be real.